To state it simply, the world of ecomm gets more competitive every year. New brands are hitting the market and quickly edging out competition, the cost of goods and services are rising, and the cost to acquire new customers isn’t getting any cheaper, either. Case in point: TikTok Shop announced they’re hiking their seller fees up to 8% per order.
If you’re reading this article, you probably are already the type of person who’s invested in optimizing your subscription program to maximize revenue. But if you’ve been waiting for the right time to come around…it’s time. Here comes our cold, hard truth pep-talk.
Subscriber acquisition, retention, and churn reduction must be optimized like any other lever of your business. If you aren’t giving yourself (or your team) the time to meaningfully improve things like your customer experience and retention marketing efforts, you are undoubtedly losing potential revenue.
How do we know? Data.
OLIPOP saved over over 4,000 customers from canceling their subscriptions using strategically-designed dynamic cancellation flows with Stay Ai’s RetentionEngine.
Obvi scaled their recurring subscription revenue over 300% by better acquiring sticky subscribers, implementing preventative churn-reduction promotions, and further investing in their retention marketing efforts.
A Pup Above generated 140%+ in add on revenue from meaningfully marketing to their existing subscriber base, in addition to offering a purchase-optimized customer portal experience.
And before you can move forward into optimizing your subscription program, it’s critical to tackle a review of its current state.
So let’s dig into the numbers. Here are some of our favorite guiding questions to ask when analyzing your subscription program’s performance. We’ve chunked them out by the four core stages of the subscriber journey: acquisition, lifecycle, churn, and re-engagement (AKA winbacks).
Stage 1: Subscription Acquisition
1) Did you test running subscription-specific versus standard ad campaigns? Segment the cohort of subscribers acquired through each method. Which cohort has the highest retention rates? Which cohort is spending the most money with your brand?
2) Did you test running subscription-specific landing pages, or did you first introduce your subscription offerings with PDP buy boxes? Segment the cohort of subscribers acquired through each method. Which cohort is the stickiest? Which cohort has the highest LTV/AOV?
3) Review the performance of any and all campaigns that nudged one-time-purchasers to upgrade to subscription. Look for commonalities to identify what led to the highest CVR. Then check out how those upgraded buyers are doing. Are they sticky?
Stage 2: Subscriber Lifecycle
1) Review your subscriber-targeted upsell & cross-sell efforts in 2023. When did you see spikes in add-on revenue or existing subscriber recurring revenue growth? Which campaigns or optimizations led to these wins?
2) Segment out your highest AOV/LTV and longest-retained subscriber cohorts. Which products are these customers buying? Are they regularly swapping things in and out, or are they committed to a few SKUs?
3) If you ran multiple existing-subscriber promotional campaigns – discounts, free GWP, etc – look for trends across your top performers. What types of subscribers responded best to these campaigns? Which promotional offers did they prefer? Is there a relationship between X type of promotional offer and delivery at Y timing in the customer journey
4) What actions were customers taking most in your customer portal? Did you have high skip/pause rates? How can you incentivize subscribers to make those transactions instead of skipping them
5) Review your subscriptions by subscription timing data. Did a significant amount of subscribers adjust their subscription timing during the lifecycle? How could you use this data to refine your acquisition offerings, or better educate existing subscribers on regular product usage?
Stage 3: Subscriber Churn
1) When in the customer journey are customers churning? After how many orders, months, or $ spent? Review data not only by timing, but also selected cancellation reason. How can you proactively intervene to prevent this churn?
2) Were there specific days, weeks, or months where you saw notably high churn rates? What might have triggered that trend?
3) Which of your products are associated with the highest rate of customer churn?
4) Dig into churn by acquisition cohort, then map back to the acquisition efforts you ran that month. Which campaigns, channels, or pages seem correlated to high-churn cohorts?
5) What were your top 2-3 most frequently reported cancellation reasons in 2023? What tools or strategies can you leverage to directly address these subscriber concerns?
Stage 4: Winbacks & Re-Acquisition
1) Review your winback data. Which channels were most effective for re-acquiring churned subscribers?
2) Drill down into successful winbacks based on customer type. Segment based on purchase history, time on subscription, reported cancellation reason, etc. Which types of winbacks were most effective for these customer cohorts?
3) Review winbacks by month. Were there specific times last year that customers acted on winback offers? Why might that be the case?
4) Review time between cancellation and winback. Did you test sending winback offers based on specific triggers, or a variation of dates after cancellation? Where are the trends in conversion?
Find Out More About How Stay Ai Can Help You Make More Subscription Revenue in 2024
Stay Ai is more than just a subscription app — it’s a powerful revenue generation and retention marketing tool. AI-powered features enable you to effortlessly turn your subscription program into an optimized performance channel, so you can spend your workdays focusing on the the big decisions that AI can’t make for you.
At the end of the day, Stay is designed to make you more money, while ensuring that your customers have an unparalleled subscription experience along the way.
Ready to see how AI can scale your subscription revenue?
Just click Get Started below to chat with our team of subscription & retention experts.